Watt Confirmed to Replace DeMarco

After first delaying action on hisrnnomination for months and then rejecting it in October the Senate finallyrnconfirmed Mel Watt as the new director of the Federal Housing Finance Agencyrn(FHFA).  The vote, 57 to 41, came laternTuesday and was the second Obama nomination ratified under new Senate rulesrnwhich effectively ended the Republican’s ability to filibuster executive andrnjudicial presidential appointments.</p

Watt, an 11-term sitting congressmanrnfrom North Carolina, will replace Edward J. DeMarco who has been actingrndirector of FHFA almost from the beginning of President Obama’s first term andrnsomeone the administration has long hoped to remove from that position.  An earlier nomination of another NorthrnCarolinian, its banking commissioner Joseph Smith, was also blocked by SenaternRepublicans.</p

Watt will take charge of the agency,rnwhich acts as regulator of the 12 Federal Home Loan Banks and as regulator andrnconservator of Freddie Mac and Fannie Mae (the GSEs) at a time when the futurernof the GSEs is in doubt.  DeMarco hasrnalready taken steps that will affect their structure in the future includingrnthe establishment of a jointly owned company that will oversee construction ofrna new secondary market platform, raising fees for the GSEs’ government-backedrnguarantee, and putting in place a risk sharing structure.</p

Housing and Urban Development Secretary Shaun Donovan said that Watt’srnconfirmation represents an important step in the housing market’srnrecovery.  Watt, he said, has a provenrnpublic and private sector track record of “protecting consumers, fightingrnabuses, championing economic growth, and working across the aisle on importantrnissues that benefit the common good.”</p

E.J. Burke, Chairman of the Mortgage Bankers Association (MBA), issuedrnMBA’s formal statement on the confirmation, saying, “MBA looks forward to working with Director Wattrnon developing and implementing ideas to improve the function of the secondaryrnmortgage market.  Fannie Mae and Freddie Mac have been in conservatorshiprnfor more than five years, and it’s well past time to move forward on reform.rn As Director of FHFA, Congressman Watt will have a historic opportunity tornshape the secondary mortgage market and the government’s role in housing. </p

Another early comment on thernconfirmation came from Financial Services Committee Chairman Jeb Hensarlingrn(R-TX) who said of his fellow committee member that he has been thoughtful andrnwell-respected during his tenure but that he has big shoes to fill in replacingrnDemarco.  Hensarling said he challengedrnWatt to carry on DeMarco’s policies.  </p

At the time of the Senate vote Wattrnwas in South Africa attending the state ceremony for Nelson Mandela.

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